Bank of Ghana Unveils New FX Framework to Bolster Transparency and Market Confidence
The Bank of Ghana (BoG) has introduced a new Foreign Exchange Operations Framework aimed at enhancing transparency, market stability, and investor confidence in the country’s foreign exchange regime.
Approved by the Bank’s Board, the new framework outlines clear objectives and guiding principles for the central bank’s interventions in the foreign exchange (FX) market. It is part of efforts to maintain macroeconomic stability under Ghana’s inflation-targeting regime and flexible exchange rate system.
Clarity and Stability in Focus
Under the new system, the BoG will pursue three core objectives — reserve accumulation, market stabilization, and transparent intermediation of foreign exchange flows.
The central bank says it will continue to build external reserves to serve as a buffer against external shocks while acting to minimize excessive short-term volatility in the foreign exchange market without undermining market-determined exchange rate flexibility.
The BoG also plans to intermediate FX flows in a “market-neutral” manner, using inflows from sources such as the Gold Purchase Programme and other export surrender arrangements. This approach, the Bank notes, will ensure orderly and transparent release of FX inflows into the market without influencing the exchange rate trend.
A Rule-Based, Transparent Approach
According to the Bank, the new framework promotes a rule-based system that allows exchange rates to be determined primarily by market forces, while permitting measured interventions only to address market disruptions.
FX operations will now be conducted through competitive, variable-rate, fixed-amount auctions, ensuring fair participation and transparency.
Transparency remains central to the framework’s design. Auction volumes will be announced ahead of time, and results will be published on the same day. The BoG will hold twice-weekly FX operations for flow intermediation, pre-announced at the start of each month, while interventions to address volatility will be communicated on or before the day of execution.
Additionally, the central bank will publish aggregated monthly FX data — clearly separating different operational objectives — within five business days after each month’s end.
Strengthening Market Confidence
The BoG says the new structure reflects its commitment to openness and accountability, key factors in rebuilding market confidence amid continued pressure on the cedi and broader macroeconomic challenges.
“This new FX Operations Framework reflects our commitment to transparency, market confidence, and macroeconomic stability,” the Bank said in a statement. “By clarifying our objectives and processes, we aim to strengthen resilience while preserving the flexibility of Ghana’s exchange rate regime.”
The rollout of the framework comes as Ghana continues efforts to stabilize its currency, rebuild reserves, and attract investment inflows following recent macroeconomic headwinds.
